Sonic Is On A Roll

An understated press release recently came out that announced Jetblue has chosen SabreSonic as their new host system. It gives a hint of JetBlue branching out to expand partnerships:

Rick Zeni, JetBlue's Vice President of Change Management-Passenger Service System. "Sabre will allow JetBlue to offer greater revenue-producing codeshare and interline partnership opportunities... "

A few notes:

- Looks like some consultant got the final say to Zeni's title "Change Management - PSS"?

- This is actually the second announcement of Sabre scoring a host win in 2009 – the other being a recent WestJet announcement. We know that Amad-oose is pounding the market with Altea – but Sabresonic has some momentum going for it.

- Even more interestingly – both of these airlines used to be on the Navitaire platform. JetBlue probably decided to look around since they had to migrate to the New Skies platform anyway. It just seems telling that Navitaire wasn’t able to keep Jetblue in the fold despite all of the features New Skies is supposed to add.

- The timing is also interesting right after Sabre's purchase of EB2. We assume that Sabre is planning to incorporate EB2 as their new IBE platform (the Frontier migration to Datalex would have been the first clue they had to do something) – but we wonder if JetBlue will be the launch partner for that platform (or Westjet).

- The press release says that Jetblue will take control of Sonic in 2010. FMV is always amazed at how long integrations projects like this take, so we’ll be watching to see if JetBlue is any different. We'll also see if they can implement the IBE in that timeframe as well.

- Finally, we can’t help but love the name “Sabresonic”. It always reminds us of “Sonic the Hedgehog” which is one of our favorite video games. Any reason to dredge up Sonic once again is ok in our book. Though "Grand Theft Airline" has a snappy, edgy ring to it, too... Maybe next time.

Stimulous we can believe in

We saw in the paper today that, for the next few months, JetBlue is offering passengers a full refund if they buy tickets and subsequently get laid off. Granted, knowing that you're getting a refund isn't going to make you feel any better while you box up your cubicle. If you're that worried about getting canned, you probably won't book a trip to the islands anyway.

However, it appears that more and more people aren't buying anything (especially luxuries like travel) just because they are afraid that they should be afraid. A promo like this is just what it might take to get some of those people off the sidelines. In fact, in such cases, the promo won't cost JetBlue a dime (even before you get to the fine print). More importantly, the promo might swing some share toward JetBlue.

Kudos to JetBlue.

BetaBlue: Still Free, Less Limited

There was about a 1" tall article in the WSJ this week explaining that JetBlue has expanded their Beta test of inflight Wi-Fi. WSJ subscription required, so link here instead. Here is why you can ignore this progress:

• The service is still only offered on one plane. Not a typo, one plane.


• The service now allows access to one web site, Amazon.com. Not a typo, one web site.

Here's why it's kind of interesting:

• E-mail now available via Gmail, Microsoft, and AOL


• One can conclude that the limited test to date has been successful, allowing [extremely nominal and arguably negligible] expansion of the pilot. Hopefully this means a full and worthwhile deployment may follow in our lifetimes.

We have to assume, given how much convention hotels charge for Internet access, many passengers would gladly pony up say $5/hour or $10-$20/flight (or more) for e-mail access. Corporate travel buyers may not be giddy about that prospect, but certainly Jetblue is. That aside, a nice round of applause for the PR person that padded their release count with this "news".

Some Economy Seats are More Economy Than Others

Since FMV moved it’s headquarters to Chicago late last year – we find ourselves flying United a lot. You may think it’s because of their weird faux-cartoon ads that they plaster everywhere – but it’s really because of their “EconomyPlus” seating with extra legroom. After earlier hints, JetBlue has officially jumped on that bandwagon:

JetBlue will reconfigure its Airbus A320 fleet to offer seats with more legroom, and will charge more for those seats. JetBlue is calling the product Even More Legroom, which will offer 38 inches of pitch in the second to fifth rows plus emergency exit rows 10 and 11... The airline will charge $10 each way for short-haul flights (under 600 miles), $15 for medium-haul flights (601 to 1,500 miles) and $20 for long-haul flights (over 1,500 miles).

That’s actually great – but there is also another kicker:

The airline won't be selling Even More Legroom in the GDSs because of "technological limitations," JetBlue said. But the airline added that clients who book via a GDS can go to the Manage Your Flight link on JetBlue's Web site to purchase the extra legroom.

A few FMV points:

1) OK, we just assumed that JetBlue’s marketing department had a down day when they branded their new refundable fare product “Refundable Fares”. But seriously, “Even More Legroom”? Please try a little harder to imply that the old coach seats don't have crappy legroom. You know who will REALLY hate this name?? The call center agents who face this scenario happening 100 times a day:

JetBlue Agent: “Hello, You have reached JetBlue – how may I help you”

Customer: “Uhh, Hi – I bought a seat for my upcoming trip, and I know I get a roomy seat, but I’d now like to purchase EVEN MORE LEGROOM!! Ha Ha Ha”

2) This also has “Ancillary Revenue” written all over it and kind of goes against the Jetblue vein. Fine – you don’t have a “business class” – but you now have the beginnings of tiered system…

3) Finally – and most importantly - we love the fact that this purchase option is not available in the GDS. It’s the mythical “Fourth Cabin” limitation of GDSs; they cannot inventory control this type of stuff, and therefore can’t sell it. But FMV will bet you $10 (Even More Legroom for a short-haul flight) that the GDSs come out and blame the airline as not being “buyer focused” for doing this to them. It's classic GDS victim-hood at it's best (see Air Canada).

So while you won't catch us flying JetBlue just yet (simply not enough flights from ORD), we applaud them for providing meaningful product differentiation (i.e. not just a seatback TV and faux-hipster vibe). We also applaud mother nature, for dumping a (late) winter storm on Chicago today, giving us the perfect excuse to duck out early to watch the NCAA tournament. For those stuck on a cot at ORD - sorry, but these things happen for a reason.

Ancillary Revenue: Not Just for Pillow Sales

All too often, when pundits talk about airline ancillary revenue, it's all about selling snacks on board or charging passengers to use the bathroom. Today, a special thanks to a yawner article about JetBlue for reminding us that ancillary revenue can come from the most basic form of nickel and diming: change fees.

Today's ATW Daily News reports that JetBlue expects a 50% year-on-year increase in ancillary revenue in 2008, bringing annual nonfare income to over $250M. For comparison, 2006 "other revenue" was $139M, and we estimate the 2007 number will be around $190M (based on JBLU 3Q07 Form 10-Q). That got us wondering exactly how they make that money.

It turns out, that for the third quarter of 2007, their filing footnotes explain that most of the other revenue increase was "primarily due to higher change fees and excess baggage fees...resulting from more passengers and increased change fee rates". Sweet! That is so old school! Hundreds of millions of dollars from simply selling nonrefundable fares, and then charging people to reclaim the purchase after their plans change.

Sports cliche: Sick to the fundamentals, Take it game by game, Give it 110%, don't get fancy.

If you actually read that article, it also turns out that JetBlue will try to boost passenger revenue by, we paraphrase, copying United's EconomyPlus seating model. But they WILL NOT, we repeat WILL NOT, emulate United's 2nd bag policy. Hip, nimble, JetBlue can't go for that legacy carrier stuff.

JetBlue: Labor Strife in Marketing Dept.?

We normally try to stick to the facts, but in this case we'll start a rumor. Something is amiss in the Marketing Department at JetBlue. It simply has to be.

Here is the skinny. As we understand it, the carrier observed that certain customer segments frequently change their travel plans, and may pay a premium for a fare that allows changes or refunds. On Monday, the carrier announced that, for those customers, there would be a new product offering flexibility and convenience that is cleverly named "Refundable Fares".

Hoo boy, that's rich. Refundable Fares? Seriously, someone please tell us they did not pay somebody to brand that? Is there a whiteboard somewhere with TrueRefund, BlueRefund, FlexBlue, and RefundaBLUE scratched out? What kind of a world do we live in, where a straightforward proposition does not need a snappy name?

Anyway, you get 4x TrueBlue points if you buy a Refundable Fare. So at least we know the marketing department is there. They just don't seem to be functioning at peak.

Free In-flight Wireless*

*Sometimes, Maybe, & Limited. Your mileage may vary. All Rights Reserved.




This is a bit outside our core discussion area, but we feel compelled to comment on JetBlue's new inflight Wi-Fi service, which apparently debuted a little while ago It seems pretty cool to offer this service, and we can understand people getting excited about it, so we're not surprised JetBlue's getting a bunch of media buzz. However, when we read the details we were left underwhelmed:

• Works on limited devices only



• Works only with Yahoo! mail



• Hardware/bandwidth won't allow for attachments to mail or full web access



• Probably only available on transcons



• No available roll-out plan

The most telling quote from JetBlue, "It's not marketable. It'll have to be more of a surprise and delight for our customers if they get it." Well, with that kind of attitude, they certainly can't charge for it. And they won't. Though they imply that someday if they can get it right they may. Which is why we're keeping an eye on this.

But in the meantime, we're just annoyed that this is portrayed as something really special when it seems to be little more than a parlor trick.